Israel's Trade Agreements

In recent years, the State of Israel has signed a series of trade agreements. The importer of goods from a country with which Israel has signed a trade agreement must verify what are the “origin regulations” – which determine whether the product made in that country is eligible to enjoy the benefits set forth in the specific trade agreement, and what are the necessary documents for obtaining the benefit set forth in the agreement

Israel-European Union Free Trade Zone Agreement

In July 1975, a Free Trade Agreement was signed between Israel and the countries of the European Union. Under this agreement, Israel gradually reduced its import duties on industrial imports from the EU market until they were completely lifted in January 1989.

Only products originating in EU countries, directly imported from EU countries to Israel and accompanied by an EUR1 certificate of origin or a certificate of declaration of the exporter, are eligible for customs discounts on imports from the EU to Israel.

In November 1995, an agreement was signed which improved the basis of trade relations with the European Economic Community. Its implications on imports are primarily expressed in a reduction of the surcharges levied on agricultural goods originating in EU countries.

The countries included in the agreement are listed below:

Austria

Belgium

Greece

Finland

Italy

Germany

Luxembourg

France

Ireland

Denmark

Spain

Sweden

UK

Holland

Portugal

Israel-USA Free Trade Zone Agreement (FTA)

In April 1985, Israel and the United States entered into an agreement for the establishment of a free trade zone. Under the agreement, import duties between the two countries were gradually lifted. Import duties were completely eliminated effective as of January 1, 1995 (assurance charges – BITHA – are levied on food products and agricultural products imported from the U.S.). Only products originating in the U.S., directly imported from the U.S. and accompanied by a FORM A certificate of origin, are eligible for customs discounts.

Israel-EFTA Free Trade Zone Agreement

On January 1, 1993 a free trade zone agreement was signed between Israel and EFTA countries, as a esult of which import duties on industrial products were immediately lifted. Only products originating in EFTA countries, directly imported from EFTA countries to Israel and accompanied by an EUR1 certificate of origin or a certificate of declaration of the exporter, are eligible for customs discounts.

The countries included in the agreement are listed below:

Iceland, Liechtenstein, Norway, Switzerland.

Free Trade Zone Agreements with Individual Countries

CanadaA free trade zone agreement was signed between Israel and Canada in September 1996, which went into effect on January 1, 1997. As a result, an immediate exemption was granted on industrial products in Chapters 25 to 97 of the Customs Tariff, with the exception of a small list of products. To be eligible for the benefits provided in the agreement, the consignment must be accompanied by a certificate of origin.

TurkeyThe trade agreement between Israel and Turkey went into effect on May 1, 1997. Under the agreement, an immediate exemption was granted on industrial imports that conform with the regulations of origin and are not mentioned in Appendices 1, 2 and 3 of the agreement. Discounts were granted on these sensitive products according to a reductions table which became fully exempt in 2002. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter. Czech Republic and Republic of SlovakiaThe trade agreement between Israel and the Czech Republic went into effect on January 1, 1997, and a similar agreement was signed with the Republic of Slovakia. Under the agreement, an immediate exemption was granted on industrial imports that conform with the regulations of origin. Discounts were granted on sensitive products according to a reductions table which became fully exempt in 2002. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter. PolandOn January 1, 1998 the third agreement was signed with Poland. This was preceded by similar agreements with the Czech Republic and the Republic of Slovakia. Under the agreement, an exemption was granted on industrial imports classified in Chapters 25 to 97 of the Customs Tariff, with the exception of several products mentioned in Appendix 1 of the agreement. Discounts were granted on these sensitive products according to a reductions table which became fully exempt in 2002. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter. HungaryOn January 2, 1998 the trade agreement between Israel and Hungary went into effect, which gave an immediate exemption on industrial imports conforming with the regulations of origin. Discounts were granted on sensitive products according to a reductions table which became fully exempt in 2001. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter. MexicoOn July 1, 2000 the free trade zone agreement between Israel and Mexico went into effect. The object of the agreement was to ensure equal competitive conditions for Israeli exports compared to suppliers from NAFTA countries. The agreement provided for reduced customs on all industrial products as well as a list of food and agricultural products. The agreement contains a limited list of sensitive products in which the import duties levied on them will be gradually reduced and eventually will become fully exempt by January 1, 2005. Import duties were gradually reduced on all other industrial products until they became fully exempt on January 1, 2003. Rules of Origin – The rules are specific for each product depending on its classification in the Customs Tariff. A product is considered “Original” according to its production processes. Other rules of origin criteria were determined in the textile fields. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with a certificate of origin that was determined in the trade agreement between Israel and Mexico, and the consignment must be shipped directly from Israel to Mexico. RomaniaOn January 7, 2001 the trade agreement between Israel and Romania went into effect, which gave an immediate exemption on industrial imports conforming with the regulations of origin. Discounts were granted on sensitive products according to a reductions table which will become fully exempt in 2004. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter.

BulgariaThe trade agreement between Israel and Bulgaria went into effect in 2001. The agreement is identical to the trade agreement with Romania, so that under the agreement an immediate exemption was given on industrial imports conforming with the regulations of origin. A gradual reductions table was determined for sensitive products. The regulations of origin set forth in the agreement are identical to the regulations of origin provided in the agreement between Israel and EU countries. To be eligible for the benefits set forth in the agreement, the consignment must be shipped with an EUR-1 certificate of origin or a declaration given by the exporter.

JordanThe trade agreement between Israel and Jordan was signed in October 1995 for a three-year period, which is automatically renewed if it has not been terminated by one of the parties. Within the framework of the agreement, it was decided to lift all and any economic boycotts and to grant most favored nation (MFN) status to each other. The regulations of origin determined that the main criterion for a material change in the product is if there is a value addition of 35% of the product value ex-factory, provided that the goods undergo a production process that is not minimal processing.